4 Wash. 544 | Wash. | 1892
Lead Opinion
The opinion of the court was delivered by
The respondents, Edson Keith & Co., plaintiffs below, were judgment creditors of the defendant Samuel Kreidel, who was accused of having made a fraudulent deed to one of his co-defendants of certain lands, comprising all the real estate owned by him, and of having made several fraudulent chattel mortgages to the others, respectively, which mortgages covered all of his personal property. Thecomplaintallegesthe rendition of judgment in favor of plaintiffs against Kreidel for the purchase money of goods sold to him to the amount of $2,000, and that execution was issued thereon, and was duly returned wholly unsatisfied, and that the debt for which said judgment was obtained was contracted previous to the making of said transfer and mortgages. It alleges Kreidel was a merchant doing business in the city of Ellensburgh, in the county of Kittitas, in this state; that said business consisted of dealing in dry goods and general merchandise; that his stock of goods was of the value of $20,000, and that he was the owner of certain real estate and was reputed to be worth $16,000 or more above all liabilities, and upon this reputation was able
None of the defendants, saving Marks Harris and Isaac Harris, made answer to the complaint, and default was entered against them. After the time for answering had expired, and default had been entered, an attempt was made by some of them to answer, but the superior court held the showing insufficient, and refused to set aside the defaults.
Samuel Kreidel was a son-in-law of Marks Harris, and was formerly in partnership with him, conducting a mercantile business at Seattle, in this state. This partnership was dissolved in 1886, and, upon its dissolution, appellants claim Kreidel purchased the interest of said Marks Harris in said business for the sum of $12,000, and gave him his note therefor, without any security. The deed of the real estate in question was executed June 24,1890, by the defendant Kreidel to Marks Harris, it is claimed, in payment of this indebtedness. The property was considered to be worth $30,000. The recited consideration was $32,000, the property being subject at the time to a mortgage of $13,900, and a lien for $2,150, and also to a claim of another party, the amount of which is not stated. This deed was not placed upon record, it seems, until two days before the failure of Kreidel, in September, 1890. Isaac Harris was a brother-in-law of Kreidel, and William Harris was his wife’s uncle.
The superior court found for the plaintiffs, and adjudged that said deed and mortgages were made for the purpose of perpetrating a fraud upon the creditors of Kreidel, including the plaintiffs, and set the same aside. All the defendants, excepting Kreidel, appealed from this decree, and the contest is as to the sufficiency of the evidence to sustain it.
After his purchase of the goods at the sheriff’s sale resulting from the prosecution of the attachment lien o.b*
Appellants contend there was no evidence, beyond mere badges of fraud, shown to establish the allegations of the plaintiffs, and that these were all satisfactory and clearly explained by testimony which was introduced by the defendants, and, consequently, the court erred in adjudging said conveyances to be fraudulent; that badges of fraud should not be given the force or effect of overcoming direct testimony going to show the transactions were Iona fide for the purpose of paying and securing actually existing indebtedness; that the transactions amounted to nothing more than a preference of creditors, which is recognized as legal and authorized in this state. It seems to us, however, the proof goes farther than this. There were many circumstances shown going to substa fraud, such as the relationship of further fact that the deed to the re? the records until Kreidel was unab business, whereby the knowledge ■ was concealed from the public, anu . ■ being in possession of the real estate, and the apparent owner thereof, and being by virtue of the circumstances enabled to procure a large amount of credit, and his continuing to purchase goods up to the last moment, together with the fact that prior to the execution of the deed said te the charges of parties, and the 'v was kept from tger continue in ing been given l at said times
In relation to the stock of merchandise, it appears in the prosecution of the attachment suit by William Harris, who procured the interest of the first attaching creditor, and prosecuted the same to judgment, and to a sale of the property thereunder, that certain expenses were incurred, such as sheriff’s fees, amounting to several hundred dollars.
Kreidel testified he did not know what he was going to do an hour before he executed the mortgages. He also testified that William Harris had no knowledge thereof, yet this is hardly consistent with the fact that two days before these mortgages were given, William Harris had placed this deed given to Marks Harris on record, and that no explanation of the delay in having the same recorded was in any wise offered. On the day these mortgages were executed i.t seems Isaac Harris, to whom one of them was given, was not present and had no knowledge thereof. He was notified by telegraph, and wired he would accept the same; and at the time William Harris took possession of the goods it further appears no inventory was taken; that the defendant Kreidel had previously continued to purchase goods right up to the time aforesaid, and at that time some forty odd boxes of boots and shoes were piled up in front of the Store unopened, though these were subsequently replevied; that on the first day of November the said William Harris purported to convey said stock of goods to Marks Harris, and in the short period of about four months it seems the father-in-law had thus been made the nominal owner of all the property, both real and personal, which formerly belonged to Kreidel,including even his exemptions; that said Kreidel was in full possession of the same and carrying on the business under a nominal salary, paying the expenses of the previous proceeding out of the business, giving credit, collecting money on the books, and selling the mortgaged property without applying the proceeds to the payment of the mortgages, and this was continued until the mortgaged
Wethink there is evidence enough to sustain the findings^ made. At any rate, upon the whole case, we do not feel' we would be justified in disturbing the decreeof the learned judge of the lower court, and the same is hereby affirmed.
Anders G. J., and Dunbar and Stiles, JJ., concur.
Dissenting Opinion
(dissenting). — I am unable to agree with the conclusions of the majority in this case. The question decided, however, being almost exclusively one of fact, a lengthy discussion would be of no profit. I shall, therefore, content myself with saying that, in my opinion, none of the circumstances relied upon to establish fraud on the part of the defendants are sufficient to more than arouse a suspicion, and are entirely insufficient to establish fraud. If the facts are to be investigated from a standpoint that fraudulent acts had probably been committed,some circumstances may appear which tend to establish fraud. The rule of law, however, as I understand it, is that fraud will never be presumed; hence, it is the duty of the court to assume that all the acts of the parties engaged in the transaction were proper and lawful until the contrary appears, and to investigate all the circumstances with the view of harmonizing them with such lawful purpose. With this rule as a basis, all the circumstances relied upon as tending